China is in the transitive condition from planned economy to market economy, and it is crucial to have an insight view on how Chinese firms make their financial decisions. In the purpose of developing the modern theories of capital structures, the determinants of capital structure has been widely discussed and well documented in western academia. This paper is aiming at finding the updated evidences on how theories that formulated for companies listed in developed market apply to the companies in China, and thus we conducted an empirical research on the 727 Chinese listed companies for the period 2001 to 2010. This paper contributes to the capital structure literature by adding specific characteristics of China to examine the relationship between the leverage and its determinates. The result of the panel data regression model proved that the leverage is positively related to variables such as firm size, tangibility, non-debt tax shield, volatilities of earnings, and percentage of state owned shares. While the leverage is also negatively related to variables such as profitability, growth opportunity, liquidity and share price performance. The Chinese stock market characteristics and policies are adopted to explain the results. Differ from companies of developed countries, the finding of this study suggested that Chinese companies follow specific pecking order of financing sources as internal financing, share issuance and finally debt financing. According to this study, no evidence showed that the trade off theory and marketing timing theory are not applicable to China.